This article discusses the plumbing and air conditioning contractors coverage form, MS PC 01 10 06. This form modifies the CGL forms, the building and personal property coverage form, and the cause of loss—special form. These policies are analyzed on the following pages: see CGL Coverage Form—Coverage A; see Coverage Form—Coverage B; see Medical Payments; see General Provisions of the CGL; see Building and Personal Property Coverage Form; and see Causes of Loss.

Topics covered:

Introduction Additional coverages Coverage extensions Changes to the cause of loss form Changes to the CGL coverage part Definitions Endorsements

Introduction

MS PC 01 is an endorsement that modifies the CGL forms, the commercial property form, and the causes of loss—special form; the provisions of these forms apply to the risk except as otherwise provided in MS PC 01. The endorsement enhances the coverages provided by the standard property form by offering additional coverages and coverage extensions to the commercial property form. MS PC 01 amends the exclusions section of the causes of loss form. And, as for the CGL forms, MS PC 01 adds an insuring agreement pertaining to coverage for property damage claims directly arising from the named insured's work for a client; some definitions are also added.

The plumbing and HVAC program also offers mechanical breakdown coverage through the use of an endorsement, and provides a supplemental schedule to allow the insured to choose the coverage he needs and the limit of insurance he wants for his exposures.

Additional Coverages

The commercial property form offers the insured up to $1,000 for liability for fire department service changes. MS PC 01 increases this amount to $5,000. The other provisions of the fire department service charge coverage in the commercial property form are not addressed in MS PC 01.

The commercial property form offers six additional coverages. MS PC 01 adds eight more coverages to this category.

Money and Securities. MS PC 01 will pay for loss to money and securities used in the named insured's business. The coverage is there while the money and securities are at a bank or savings institution, within the named insured's living quarters or the living quarters of the partners of the named insured or the living quarters of any employee having use and custody of the property, at the described premises, or in transit between these places. The covered causes of loss are theft, disappearance, or destruction; excluded causes of loss are accounting or arithmetical errors, loss due to giving property in any exchange or purchase, and loss of property contained in any money-operated device. Unless different limits are shown in the declarations, the most paid under this additional coverage is $5,000 while the money and securities are in a bank or the described premises, and $2,500 for loss while the money and securities are anywhere else. The named insured has the duty to keep records of all money and securities so that the insurer can verify the amount of any loss or damage.

Fire Extinguisher Systems Expense. This endorsement will pay for the cost of recharging or replacing—whichever is less—the fire extinguishers and extinguishing systems if they are discharged on or within 100 feet of the described premises. Also covered is loss or damage to covered property as a result of an accidental discharge. The most that will be paid under this coverage is $5,000 in any one occurrence, with no deductible applying.

Reward Payment. The named insured will be reimbursed up to $5,000 for rewards paid to an eligible person for information leading to the arrest and conviction of any person committing a crime resulting in loss to covered property from a covered cause of loss. Up to $5,000 is also paid for a reward paid to an eligible person for the return of stolen covered property when the loss is caused by theft. An eligible person means that person designated by a law enforcement agency as being the first to voluntarily provide the information leading to the arrest and conviction or return of the stolen covered property. The following persons cannot be eligible persons: the named insured and family members; the named insured's employees and family members; an employee of a law enforcement agency; an employee of a business engaged in property protection; any person who had custody of the covered property at the time the theft was committed; or any person involved in the crime.

Money Orders and Counterfeit Money. The insurer will pay for loss resulting directly from the named insured's having accepted in good faith money orders not paid upon presentation, or counterfeit money that is acquired during the regular course of business. The most that will be paid for any loss under this additional coverage is $1,500, unless a different limit is shown on the declarations.

Forgery or Alteration. The insurer promises to pay for loss resulting directly from forgery (a defined term) or alteration of checks, drafts, promissory notes, or similar written promises to pay a sum certain in money. The most to be paid is $5,000 in any one occurrence, unless a different limit is shown in the declarations. This amount includes legal expenses of the insured in case the insured is sued for refusing to pay the forged or altered instrument on the basis that it has been forged or altered.

Note that mechanically reproduced facsimile signatures are treated the same as handwritten signatures. And, for the purpose of this coverage, a check includes a substitute check as defined in the Check Clearing for the 21st Century Act; such a check is treated the same as the original it replaced.

Outdoor Signs. The insurer promises to pay for direct physical loss of or damage to all outdoor signs at the described premises that is owned by the named insured, or owned by others but in the care, custody, or control of the named insured. The most to be paid in any one occurrence is $5,000. Note that the provisions here supersede all other outdoor signs coverage references in the commercial property form.

Employee Dishonesty. MS PC 01 will pay for direct loss of or damage to the named insured's business personal property, money, and securities resulting from dishonest acts committed by any of the named insured's employees. The employees have to have the manifest intent to cause the named insured to sustain loss, and to obtain financial benefit. The loss suffered by the insured will be paid up to $5,000 in any one occurrence.

There are several limitations to this coverage. MS PC 01 will not pay for loss or damage resulting from any dishonest or criminal act committed by the named insured, partners, members, officers, managers, directors, trustees, authorized representatives, or by anyone to whom the named insured entrusts the property that is taken or damaged. The endorsement will not pay for loss or damage, the proof of which as to its existence or amount, is based on an inventory computation or a profit and loss computation. The endorsement will not apply to loss or damage that the named insured sustains through acts not committed during the policy period, and the coverage will apply only for loss or damage discovered no later than one year from the end of the policy period. The limits of insurance for this type of coverage do not accumulate from policy period to policy period. And, this endorsement does not apply to loss caused by any employee after discovery by the named insured of any dishonest act committed by that employee before or after being hired by the named insured. So, if the named insured hires someone it knows has been convicted of theft or fraud, and that employee then proceeds to steal from the named insured after being hired, the loss is not covered by MS PC 01.

Artificially Generated Electrical Current. The endorsement will pay for loss or damage to computers due to artificially generated electrical current if such loss or damage is caused by or results from an occurrence that took place within 1,000 feet of the described premises.